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2021 (4) TMI 562 - AAR - GSTClassification of goods - rate of GST - Bollards - Bolts, nuts, screw, washer etc. known as fixtures - Frontal Frames - Fascia Pads UHMW PE pads - Buoys - Chains/Swivel/D-Shackle/Chain tensioner - Rubber Fender (both types) - few products such as frontal frames with fascia pads along with fixture as a complete set - fender panel system along with services such as assembly, installation supervision service - supply of installation service where usage of chemical is essential to provide effective service - composite supply or not - classification of the bundle. Classification of goods - rate of GST - Bollards - HELD THAT - Bollards would be rightly covered under Tariff heading 73259999 - N/N. 01/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time), Sub-heading 7325 finds mention at Entry No.237 of Schedule-III of the said notification wherein the GST liability is 18%. Classification of goods - rate of GST - Bolts, nuts, screw, washer etc. known as fixtures - HELD THAT - Fixtures such as bolts, nuts, screws and washers are specifically covered under the aforementioned sub-heading 7318 of the First Schedule to the Customs Tariff Act, 1975 - The goods finds place in Sub-heading 7318 which finds mention at Entry No.232 of Schedule-III of the said notification on which GST liability is 18%. Classification of goods - rate of GST - Frontal Frames - HELD THAT - Looking to the description of the product given by the applicant as well as the photographs of the Frontal frames provided by the applicant and comparing the same to the above, it appears that the said product will be rightly covered under Sub-heading 7326 and specific tariff heading 73269080 of the First Schedule to the Customs Tariff Act, 1975 - The goods as per Notification No.01/2017-Central Tax(Rate) dated 28.06.2017(as amended from time to time) is found under Sub-heading 7326 finding mention at Entry No.238 of Schedule-III of the said notification on which GST liability is 18% Classification of goods - rate of GST - Fascia Pads UHMW PE pads - HELD THAT - Tariff heading 3920 covers plates, sheets, film, foils and strips of plastics combined with other materials and Tariff heading 392010 covers sheets of polyethylene. Images of UHMW PE pads (as obtained from internet) are placed above. Also, as described by the applicant, fascia pads are made of high quality of plastics (polyethylene )and are applied on the frame structure on which vessels/ship hull touches - the Fascia pads which are sheets of polyethylene(made from polymers of ethylene) would be rightly classifiable under the Tariff heading 39201099 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 3920 finds mention at Sr.No.106 of Schedule-III of the said notification on which GST liability is 18%. Classification of goods - rate of GST - Buoys - HELD THAT - The said product rightly merits classification under the Tariff Heading 89079000 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 8907 finds mention at Sr.No.251 of Schedule-I of the said notification on which GST liability is 5%. Classification of goods - rate of GST - Chains/Swivel/D-Shackle/Chain tensioner - HELD THAT - There is no specific entry for the products i.e. swivel, shackles and chain tensioner under the said sub-heading - chains would be rightly classifiable under Tariff heading 73158900 whereas dshackles and swivels would be rightly classifiable under Tariff heading 73159000 (being parts or accessories). However, since we do not find any specific mention of chain tensioners any where, we find it necessary to know what a chain tensioner is. We therefore, find it prudent to refer to the definition of a chain tensioner as per the dictionary - The said product is a device which forms a part or accessory to a chain which adjusts slackness in the chain to enable continuous and proper chain operation and would therefore be rightly classifiable under Tariff heading 73159000 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 7315 finds mention at Sr.No.229 of Schedule-III of the said notification on which GST liability is 18%. Classification of goods - Rubber Fender (both types) - HELD THAT - The said product rightly merits classification under the Tariff Heading 40169400 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) which reads as Boat or dock fenders, whether or not inflatable - Sub-heading 4016 finds mention at Sr.No.49 of Schedule-IV of the said notification on which GST liability is 28% - the rate of GST in respect of the aforementioned sub-heading i.e. 4016 will be 28% (14% SGST 14% CGST) upto 14.11.2017 and 18% w.e.f. 15.11.2017 after amendment. Supply of few products such as frontal frames with fascia pads along with fixture as a complete set - composite supply or not - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 01/2017 dated June 28, 2017 (as amended) - HELD THAT - The supply is concluded to be a mixed supply - Mixed supply comprising of two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. However, it is found that the supply of all the three goods involved in the said supply i.e. frontal frames, fascia pads and fixtures are leviable to GST at 18% i.e. all of them attract equal rate of tax. Hence the said Mixed supply of goods can be considered to be the supply of any of the three supplies i.e. Frontal frames (Tariff heading 73269080) OR Fascia pads (Tariff heading 39201099) OR Fixtures (Tariff heading-73181500 / 73181600 / 73182200) and the GST leviability on the said supply will be 18%. Supply of goods i.e. fender panel system along with services such as assembly, installation supervision service - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 1/2017 dated June 28, 2017 (as amended) - HELD THAT - The aforementioned supply of goods and services is not a composite supply as well as does not constitute a mixed supply - since it has been established that the aforementioned supply is neither a composite supply nor a mixed supply , we conclude that the applicant will have to supply the aforementioned goods as well as services separately and not as a combination - the supply of goods i.e. fender panel system along with services such as assembly, installation supervision service would not qualify as a composite supply or a mixed supply. Hence, there is no question of either determining the classification of this bundle or deciding it s applicable tax rate. Supply of installation service where usage of chemical is essential to provide effective service - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 11/2017 dated June 28, 2017 (as amended) - HELD THAT - The aforementioned supply of services and goods i.e. chemicals, constitutes a Composite supply - since the aforementioned supply is a Composite supply in which the Installation Service is the principal supply, the said supply will be treated as a supply of Installation Service in terms of clause(a) of Section 8 above, and therefore, the GST liability will be the tax leviable on Installation Service - Installation Service appears at Sr.No.25 (ii)of the said notification on which GST liability is 18%.
Issues Involved:
1. Classification of specific products under GST and applicable tax rates. 2. Whether the supply of certain products as a complete set qualifies as a composite supply. 3. Whether the supply of goods along with services qualifies as a composite supply. 4. Whether the supply of installation services involving chemicals qualifies as a composite supply. Detailed Analysis: Issue 1: Classification of Specific Products under GST and Applicable Tax Rates - Bollards: Classified under Tariff Heading 73259999 as "Other cast articles of iron or steel". GST rate applicable is 18% (9% CGST + 9% SGST). - Bolts, Nuts, Screws, Washers (Fixtures): Classified under various sub-headings of 7318: - Bolts and Screws: 73181500 - Nuts: 73181600 - Washers: 73182200 GST rate applicable for all these fixtures is 18% (9% CGST + 9% SGST). - Frontal Frames: Classified under Tariff Heading 73269080 as "Other articles of iron or steel". GST rate applicable is 18% (9% CGST + 9% SGST). - Fascia Pads (UHMW PE Pads): Classified under Tariff Heading 39201099 as "Other plates, sheets, film, foil and strip, of plastics". GST rate applicable is 18% (9% CGST + 9% SGST). - Buoys: Classified under Tariff Heading 89079000 as "Other floating structures". GST rate applicable is 5% (2.5% CGST + 2.5% SGST). - Chains, Swivel, D-Shackle, Chain Tensioner: - Chains: 73158900 - Swivel, D-Shackle, Chain Tensioner: 73159000 GST rate applicable for all these items is 18% (9% CGST + 9% SGST). - Rubber Fender (Both Types): Classified under Tariff Heading 40169400 as "Boat or dock fenders, whether or not inflatable". GST rate applicable is: - 28% (14% CGST + 14% SGST) up to 14.11.2017. - 18% (9% CGST + 9% SGST) from 15.11.2017 onwards. Issue 2: Composite Supply of Frontal Frames with Fascia Pads and Fixtures - The supply of products such as frontal frames with fascia pads along with fixtures does not qualify as a composite supply because they are not naturally bundled and supplied in conjunction with each other in the ordinary course of business. Instead, it qualifies as a mixed supply. - The mixed supply can be classified as any of the three supplies (frontal frames, fascia pads, or fixtures), all of which attract a GST rate of 18% (9% CGST + 9% SGST). Issue 3: Composite Supply of Fender Panel System with Assembly, Installation & Supervision Services - The supply of goods (fender panel system) along with services (assembly, installation & supervision) does not qualify as a composite supply or a mixed supply. These supplies are to be treated separately. - Therefore, there is no need to determine the classification or the applicable tax rate for this bundle. Issue 4: Composite Supply of Installation Services Involving Chemicals - The supply of installation services where the usage of chemicals is essential qualifies as a composite supply. The installation service is the principal supply, and the supply of chemicals is ancillary. - This composite supply is classified under "Installation Services (other than Construction)" with Service Code 998739. - The GST rate applicable is 18% (9% CGST + 9% SGST). Rulings: 1. Classification and GST Rates: - Bollards: 73259999, 18% - Bolts (fixtures): 73181500, 18% - Nuts (fixtures): 73181600, 18% - Screws (fixtures): 73181500, 18% - Washers (fixtures): 73182200, 18% - Frontal Frames: 73269080, 18% - Fascia Pads: 39201099, 18% - Buoys: 89079000, 5% - Chains: 73158900, 18% - Swivel/D-Shackle/Chain Tensioner: 73159000, 18% - Rubber Fender: 40169400, 28% up to 14.11.2017, 18% from 15.11.2017 onwards. 2. Composite Supply of Frontal Frames with Fascia Pads and Fixtures: - Qualifies as a mixed supply. Classified as any of the three supplies with a GST rate of 18%. 3. Composite Supply of Fender Panel System with Assembly, Installation & Supervision Services: - Does not qualify as a composite or mixed supply. Supplies to be treated separately. 4. Composite Supply of Installation Services Involving Chemicals: - Qualifies as a composite supply. Classified as "Installation Services (other than Construction)" with Service Code 998739. GST rate applicable is 18%.
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